Symantec Reorganization Offers a Lesson on Knowing When to Leave

Over the years, I've worked through a number of turnarounds, mergers, acquisitions and startups. I consistently rode them out under the assumption that each provides unique opportunities for advancement and personal growth that you likely can't get anyplace else.

Looking back, though, there were a number of times when leaving would have both been less stressful and better for my career. Frankly, I think I was just afraid of going on a job hunt again and used the "advancement and personal growth" excuse to overshadow being afraid to make the wrong new job choice or end up unemployed.

This thought came to me when I read Symantec's plan for reorganization, and I thought I'd use it as an example of an event sequence that should prompt current employees to look elsewhere. It's tough to go outside-heck, I was afraid to do it myself-but sometimes conditions dictate that we do scary things.

Symantec Focuses on Products, Trims Middle Management

What triggered this was a note from a friend who couldn't figure out the Symantec reorganization and asked me to explain it. New Symantec CEO Steve Bennett has a strong pedigree, having been at both Intuit and General Electric, and this means he'll likely apply Jack Welch-like metrics.

However, GE and Symantec are very different companies, and while Bennett may have learned a bit at Intuit, he is by no means a software specialist. Software typically requires a reduced span of control. Developers need closer oversight and coordination, while managers, often called on to code, are not only the more senior programmers, but also integral to quality control.

First, to increase its span of control, Symantec will sharply cut middle management, effectively given the remaining managers more to do. Second, the company will form the "Office of the CEO," which shifts responsibility from the CEO to the next line of management, and implement a group process that doesn't make Bennett redundant (at least on paper). Third, Bennett announced a dividend that will reduce the operating capital available to the company but increase the value of the stock to those that needed regular income from it. Finally, in a move reminiscent of GE, Symantec will shift to a product-focused model rather than a customer-focused one.

What Does the Symantec Reorganization Mean?

Eliminating middle management removes a large number of highly paid employees. This will tactically improve Symantec's bottom line but reduce skills needed to ensure high-quality products in the long term.

This should provide a short-term stock boost, but it will reduce Symantec's long-term ability to compete. In addition, this will reduce opportunities for line employees to get promotions while increasing their overall workload.

Meanwhile, the Office of the CEO will nearly eliminate the CEO's day-to-day responsibilities, passing them to others but letting Bennett come in regularly and comment on or change decisions that will increasingly already be made (or delayed pending his input). This will reduce Symantec's agility and further increase the workload on Symantec's senior staff as it is increasingly asked to do its job and the CEO's job as well.

Over the short term, more work for fewer people should improve Symantec's bottom line, boosting stock prices and dividend income to stockholders. On the other hand, most everyone will get more work for the same pay, while the CEO significantly reduces his workload. Since Bennett's stock benefits are the strongest in the company, he will benefit the most from the short-term share price increases and the dividends.

Over the long term, though, the company will drift further away from customer interests, given its sharp product focus. Promotion opportunities will be reduced for rank-and-file employees, while work levels will sharply increase for senior employees. This will make retention and recruitment difficult; any problems that result will be blamed on the executive staff-who, through the Office of the CEO, will, in effect, be running the company.

Expect Symantec to hit a nasty wall and enter crisis mode in the next two to four years. It could happen sooner, too, depending on how many senior employees, who haven't already been laid off, see the writing on the wall. The well-compensated CEO will leave as well. Finding a job with a failing company will be much more difficult; odds are, those remaining at Symantec would have been better off leaving.

Know When to Walk Away...Know When to Run

Turnarounds are risky, given that most fail; that's why so few companies from 100 or even 50 years ago are around today. If you, the employee, believes in corporate leadership, and leadership believes in the company, then leaders will demonstrate competency in the industry, cut their own income for the short term to assure loyalty and visibly work their butts off to turn the firm around. Even then, you might be better going to a firm that's clearly growing and has a more certain future.

When you get a situation like Symantec, on the other hand, where it looks like the CEO is implementing a process from a very different industry, cutting his responsibilities, making changes that will increase his compensation and executing layoffs, then you can bet he's playing the short game. That won't be good for your career. To my mind, the only thing that would make Symantec a worse place to work would be if the company implemented Jack Welch's forced ranking employee compensation process. This would pit remaining employees at each other's throats.

In the end, if you determine that the company you work for is becoming more hostile to your advancement and job satisfaction and less agile, then it's time to find a friendlier home.

Rob Enderle is president and principal analyst of the Enderle Group. Previously, he was the Senior Research Fellow for Forrester Research and the Giga Information Group. Prior to that he worked for IBM and held positions in Internal Audit, Competitive Analysis, Marketing, Finance and Security. Currently, Enderle writes on emerging technology, security and Linux for a variety of publications and appears on national news TV shows that include CNBC, FOX, Bloomberg and NPR.

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